There are a number of things that franchisees do wrong, especially when they’re starting out. If you’re getting involved with a franchise, then make sure you understand these six mistakes that franchisees often make and avoid them.
1. Not Lawyering Up
The Franchise Disclosure Document and the Franchise Agreement are two very important legal documents, and they’re going to have a large impact on your life once you ascribe your name to them. Failing to review these documents with a lawyer can create some real headaches or worse down the line. So, don’t pick up a lawyer after you’ve signed the documents; get one beforehand.
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2. Not Doing the Failure Calculus
Another common mistake that franchisees make is not understanding that the possibility of failure is very real, even with hard work and determination. Because of this, you really need to ask yourself if you’ll be able to weather the storm should everything go pear shaped. If you can’t, then perhaps you shouldn’t become a franchisee in the first place.
3. Not Understanding Their Role
While you’re a business owner when you’re a franchisee, it’s important to remember that you’re not the big boss. You still take your marching orders from the franchisor. Some franchisees don’t fully appreciate this when they get involved, and this leads to frustration at best and huge problems at worst.
4. Not Doing Enough Research
There is a wealth of information available when it comes to vetting any given franchise opportunity. Naturally, you’ll want to thoroughly explore the Franchise Disclosure Document. However, that should only be the beginning of your research. After this, take the time to find other franchisees and to ask them about their experiences with the franchisor. Look into the franchisor’s history as well, and look into any pending or current litigation against them. You want to understand fully what you’re getting involved with.
5. Not Thinking Long Term
The day-to-day management of your franchise is going to require a lot, from dealing with your employees, to ordering stock, to balancing the books. Because of this, some franchisees can find themselves getting tunnel vision. Don’t allow this to happen to you. Certainly, give all of the day-to-day tasks the attention they deserve, but make sure that you’re keeping an eye on your long-term goals and the plans you have to accomplish them.
6. Not Realizing the Difficulty
“It’s a ready made business; how hard can it be?” some franchisees say before signing up. The answer is that it can be extremely difficult. From managing customers and employees to dealing with the changing policies of the franchisor, there are a number of things that will keep you up at night. Before you get involved with franchising, understand that it is going to take a lot of time and hard work on your part to be successful.
Get Help When You Need It
Remember that you don’t have to go it alone! If you ever feel underwater with your franchise, then it’s important that you reach out for support. In some cases you may be able to get this from the franchisor directly, and in other cases you may need to hire an outside consultant. Either way, your franchise’s success is tied to you, so make sure you do what’s necessary to keep things afloat.